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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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The Scheme: secondary legislation: SI2007/672

This Statutory Instrument amends Reg 10, Reg 19, Reg 20 and Reg 22 SI2005/2045 and the revised text for each is as follows;

Regulation 10 (Return and certificate if amount may be unpaid)

Paragraph 1 now reads;

‘This Regulation applies if, 17 days or more after the end of a tax period, condition ‘A, B or C’ is met’.

A new paragraph 3A is inserted which states;

‘(3A) Condition C is that;

  1. the contractor has made a return under Regulation 4 showing the amount which the contractor is liable to pay under Regulation 7 for that tax period, but
  2. the contractor has not paid the full amount shown in the return;.

Paragraph 4 now reads;

‘If condition A or B is met an officer of Revenue and Customs may give notice to the contractor requiring the contractor within 14 days of the issue of the notice to deliver a return showing the amount which the contractor is liable to pay under Regulation 7 in respect of the tax period’.

Paragraph 5 now reads

‘If;

  1. the notice extends to, or

 

  1. condition C is met in

two or more consecutive tax periods in a tax year, this regulation has effect as if they were one tax period’.

Paragraph 6 now reads;

‘On receiving a return made by the contractor under paragraph (4) or if Condition C is met, an officer of Revenue and Customs may prepare a certificate showing the amount which the contractor is liable to pay for the tax period and how much (if any) of that amount remains unpaid’.

Regulation 19 (work carried out on land owned by the person to whom payment is made).

Paragraph 2(a) now reads;

‘the person is one to whom Section 59(1)(a) of the Act applies, and’

Regulation 20 (reverse premiums)

Paragraph 1 now reads;

‘Subject to paragraph (2) a payment under a construction contract is not a contract payment if the payment is a reverse premium within the meaning of schedule 6 to the Finance Act 1999 (tax treatment of receipts by way of reverse premium) (see paragraph 1 of that Schedule) or section 99 of the Income Tax (Trading and Other Income) Act 2005 (reverse premiums)’.

Paragraph 2 now reads;

‘Paragraph 5 of Schedule 6 to the Finance Act 1999 (exclusion of receipts taken into account for capital allowances) and section 100(1) of the Income Tax (Trading and Other Income) Act 2005 (excluded cases) do not apply for the purposes of paragraph (1)’.

Regulation 22 (payments in respect of property used for business)

Paragraph 2(a) now reads;

‘property is not used for the purposes of the business of a person if it is for sale or to let (except where the sale or letting of that property is purely incidental to the business of that person) or is held as an investment by that person’.